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Eurozone four leaders agree economic growth package

24 Jun

Leaders of the eurozone’s four biggest nations have agreed in principle to measures to boost growth equal to 1% of the currency area’s economic output.
 
Germany, France, Italy and Spain outlined plans to push for a 130bn-euros (£104bn; $163bn) package.
 
But analysts suggest that with little or no new money involved, the significance of the agreement between the four was more symbolic than actual.

There is also still no consensus on issues such as common eurobonds.
 
“We want there to be a significant European growth package,” said Italian PM Mario Monti.
 
He appeared at the press conference alongside Spanish PM Mariano Rajoy, German Chancellor Angela Merkel and French President Francois Hollande.
 
The four met in Rome ahead of an EU summit on the euro crisis next week.
 
The growth package is expected to comprise several measures already in the works to boost spending on infrastructure and other investments, backed by European taxpayer money:
 
Increasing the capital of the European Investment Bank by 10bn euros, which would enable the EU government-backed institution to increase its lending capacity by several times that amount;
 
Fully deploying unused money in the European Commission’s regional funds;
 
The creation of pan-European “project bonds” – common debts used to finance specific investment projects such as the construction of pan-european transport networks.
The agreement may represent a political victory for the recently elected French president, who has demanded a growth pact despite strong reservations expressed by his Germany counterpart.
 
The leaders also sought to agree other proposals on closer integration – including a banking union and a financial transactions tax – to be put forward at the broader EU summit.
 
However, at the end of less than two hours of talks, they did not reach any agreement on the idea of eurobonds – jointly-backed eurozone government debts used to finance EU government budgets.

Posted by MJ

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